If an economy is comprised of two goods and the price of one good rises by 5 percent and the price of the second good rises 3 percent, a possible rate of inflation for the economy is 5 percent.
Answer the following statement true (T) or false (F)
False
The inflation rate must be between 3 percent and 5 percent. For the rate of inflation for the economy to be 5 percent, 0 percent of society's income would have to be spent on the good that rose in price by 3 percent, which is impossible.
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A price level increase tends to reduce net exports, thereby reducing the amount of real goods and services purchased in the United States. Economists refer to this phenomenon as
A) the barrier effect. B) the Gross Domestic Product (GDP) effect. C) the open-economy effect. D) the wealth effect.
The First Bank of the United States was chartered by
a. the federal government. b. the state of New York. c. the city of New York. d. Suffolk County.
Macroeconomics deals with the analysis of all of the following questions except
a. Why do national economies grow? b. What determines a nation's saving and investment? c. How does a central bank influence inflation? d. Why does a country experience recessions? e. How does Microsoft price its software packages?
Wayne did not look for another job after he lost his current job. As a result the
A. labor force immediately decreased. B. unemployment rate remains constant for as long as he does not look for another job. C. labor force increased. D. unemployment rate eventually decreased.